Federal Bank is an Indian private sector bank with over 1,400 banking outlets and 1,935 ATMs/CDMS across the country. With more than 16 million customers, Federal Bank is a safe bank to open your RD account and gain with Federal Bank RD interest rates 2024. Go through this blog to learn more about recurring deposits and interest rates offered by Federal Bank.
| Minimum Investment | ₹50 |
| Tenure | 6 to 120 months |
| Interest Rates for General Citizens | 5.75% to 7.50% |
| Interest Rates for Senior Citizens | 6.25% to 8.00% |
| Loan Against Federal Bank RD | Available |
| TDS on RD | Available |
Federal Bank RD Interest Rates 2024
For individuals who are seeking to diversify their portfolio with a recurring deposit or individuals who want to invest in instruments with secured returns and minimal monthly investments, a Federal Bank recurring deposit is one of the best options.
Go through this chart of Federal Bank RD interest rates 2024 for deposits under ₹2 crores, applicable to general and senior citizens in 2023.
| Period | Rates for General Citizens | Rates for Senior Citizens |
| 181 days to 270 days | 5.75% | 6.25% |
| 271 days to less than 1 year | 6.00% | 6.50% |
| 1 year to less than 13 months | 6.80% | 7.30% |
| 13 months to 499 days | 7.30% | 7.80% |
| 500 days | 7.50% | 8.00% |
| 501 days to 21 months | 7.30% | 7.80% |
| Above 21 months to less than 3 years | 7.05% | 7.55% |
| 3 years to less than 5 years | 7.00% | 7.50% |
| 5 years and above | 6.60% | 7.25% |
Features of Federal Bank RD Account
The Federal Bank RD interest rates are the highest for the 500-day tenure. However, before investing your money for the highest yield, let’s take a look at some of the various thoughtful features of Federal Bank RD.
- The minimum deposit amount for an RD at Federal Bank is just ₹50.
- There is no ceiling for maximum deposits.
- The minimum tenure is 6 months and the maximum is 10 years.
- You can withdraw interest only after maturity.
- The interest compounds every quarter.
- You can take a loan against the available RD amount.
- You can enable automatic instalment transfers from your savings account to the RD account.
How to Open an RD Account in Federal Bank Online?
Federal Bank is known for its digital innovation. So, it is easy and quick to open an RD account online and start earning with Federal Bank RD interest rates 2024.
- Step 1: Log in to the FedMobile app.
- Step 2: At the bottom bar of the Home screen, you will find ‘Investments’. Click on it to move to ‘Bank Deposits’.
- Step 3: Select ‘Recurring Deposits’.
- Step 4: Select a scheme, and enter the amount and tenure.
- Step 5: Fix a date to debit the amount, and select the debit account.
- Step 6: Confirm details and enter MPIN to complete the process.
How to Open an RD Account in Federal Bank Offline?
Here is a step-by-step guide on how to open an RD account in Federal Bank offline.
- Step 1: Visit the branch with the necessary KYC documents.
- Step 2: Ask for the RD opening application and fill it out with details including instalment amount, scheme, and tenure.
- Step 3: Submit the application form and KYC documents.
- Step 4: Pay the first instalment or fix a date to debit the amount.
After the bank verifies all documents, it will notify you about the successful opening of a Federal Bank RD account and hand over the initial account opening kits.
How to Calculate RD Interest Rates 2024 in Federal Bank?
Based on the applicable Federal Bank RD interest rates, tenure and monthly instalment amount, there are two ways of calculating the maturity value of an RD investment.
1. RD Calculation Formula
A = P x (1 + R/n)^nt
In this formula:
- n = number of times the interest will compound per year
- P = principal amount
- t = tenure
- R = interest rate
- A = maturity amount
Let’s say you are looking to invest ₹5,000/month for 5 years/60 months. As per Federal Bank RD interest rates 2024, 6.60% would be your interest rate.
With this information, you can calculate the amount you will receive after maturity.
A = 5000 x (1 + 6.60/4)^4×60 = ₹3,55,887
However, this type of calculation comes with higher chances of inaccuracy. Instead, you can use any RD calculator available online for a simpler and more accurate method.
2. Federal Bank Recurring Deposit Calculator
Calculating the maturity amount using an RD calculator is easy. Follow the steps below to do it yourself.
- Step 1: Navigate to the official webpage of the Federal Bank RD calculator online.
- Step 2: Enter the rate of interest, amount of monthly investment, and tenure.
- Step 3: Press ‘Calculate’.
You can see the results on the screen, specifying the maturity amount and the total interest earned.
Eligibility Criteria for Federal Bank RD Account
To start an RD account at the Federal Bank, you must be one of the following entities.
- Individuals
- Joint account holders
- Minor individuals with a guardian
- Hindu Undivided Family
- Clubs or Associations
- Sole proprietary concerns
- Joint stock companies
- Firms
- Any other entity that RBI approves of
Documents Required for Starting an RD Account in Federal Bank
Apart from copies of passport-size photos and the RD application form, you need two types of documents to open the account and take advantage of the high-yielding Federal Bank RD interest rates 2024.
1. Identity Proof
- Voter’s Identity Card
- Aadhaar Card
- NREGA Card
- PAN Card
2. Address Proof
- Passport
- Ration card
- Driving Licence
- Letter issued by the National Population Register
Types of Federal Bank RD Accounts
You can choose between the following types of Federal Saving Fund RD accounts, based on your financial standing and goals.
1. Resident Federal Savings Fund
As the name suggests, the Resident Federal Savings Fund is a type of standard recurring deposit applicable to all resident individuals. In this account, the minimum period varies with the periodicity of remittance of the recurring instalments.
- Minimum Deposit: ₹50/month
- Maximum Deposit: No maximum limit
- Tenure: 6 months to 10 years
- Interest Rate: 5.75% to 7.50% for the general citizens and 6.25% to 8.00% for senior citizens
- Eligibility: Indian residents
2. Millionaire Federal Savings Fund
Besides Indian residents, this type of RD scheme offered by the Federal Bank applies to non-resident Indians staying abroad. Starting from a minimum tenure of 1 year, this scheme comes with free repatriation of funds and a loan against RD facility. However, it does not provide additional interest rates to senior citizen applicants.
- Minimum Deposit: ₹50/month
- Maximum Deposit: No maximum limit
- Tenure: 12 months to 10 years
- Interest Rate: 6.80% to 7.50%
- Eligibility: Resident and non-resident Indians
Federal Bank RD Premature Withdrawal Rules
The premature withdrawal rules for Federal Bank RD accounts are as follows.
- The bank will levy a penalty amount on the premature withdrawal of an RD account.
- An RD account opened as an either-or survivor would require the signature of both account holders for premature withdrawal.
- Premature withdrawal of large deposits can also be disallowed by the bank if the holders of the RD accounts are entities other than individuals and HUFs.
- If a depositor wants to renew a deposit by prematurely withdrawing an existing RD, the bank will permit it only if the renewal is for a longer or equal period of the existing RD.
- For premature withdrawal with the purpose of renewal, the bank will not pay interest at the contracted rate, but the rate applicable to the tenure it has stayed with the bank.
- Federal Bank will not pay any interest if the deposit does not remain for the minimum tenure applicable.
- The bank has the freedom to decide what the penal interest rate will be in case of premature withdrawal of RDs.
Federal Bank RD Penalty on Premature Withdrawal
According to the Federal Bank terms and conditions, an account holder will be liable to pay a penalty in the following scenarios.
- Penal interest of 1% is levied for premature withdrawal of NRE term deposits.
- The grace period for each instalment payment is 10 days after the due date. For delay of instalment payment, an investor has to pay ₹1 for every ₹100 per month.
- Indian residents have to pay ₹150 for premature closure of an RD within 1 year of opening.
TDS on Federal Bank RD
Tax Deduction at Source (TDS) is applicable on the interest income earned from Resident RDs since 1st June 2015.
However, RD holders (other than a firm/co-operative society or a company) can claim tax exemptions by submitting Form 15G/15H or other tax exemption certificates with the bank. The tax exemption is subject to eligibility.
Loan Against Federal Bank Recurring Deposit
A depositor can take a loan against the Federal Bank RD amount. Here are some things to consider before taking the loan.
- Such loans are only available if a depositor can offer necessary security documents.
- If a loan is taken against an RD account of a minor, the guardian has to offer a suitable declaration that the loan is for the benefit of the minor.
- In the case of joint RD accounts, the signatures of both holders are mandatory to avail of a loan.
Conclusion
Although a safe and attractive option, Federal Bank RD interest rates 2024 along with its associated terms and conditions are subject to change. Therefore, it is in your best interest to consult a bank representative and verify all the details before investing in a Federal Bank RD scheme.
FAQs
According to the Federal Bank RD interest rates, senior citizens will get an additional 0.50% rate over the general citizen.
The highest Federal Bank RD interest rate is 7.50% for general citizens and 8.00% for senior citizens. The rate is applicable with a recurring deposit of 500 days.
A nomination facility is available on Federal Bank RD accounts. An account holder is only allowed to nominate one beneficiary at a time which can be a minor as well.
